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Learning Activity 5 - Classification of Costs

The document classifies various costs as either direct or indirect and variable or fixed for the musical section of Cavite Bargain Store. Costs like the cost of musical items purchased, freight costs of musical items shipped by suppliers, and annual retainer paid to the musical items distributor are classified as direct and variable. Costs like electricity costs, depreciation expense on the store's lease improvements, and general supplies are classified as indirect and fixed.

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Ara Joyce Permalino
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197 views1 page

Learning Activity 5 - Classification of Costs

The document classifies various costs as either direct or indirect and variable or fixed for the musical section of Cavite Bargain Store. Costs like the cost of musical items purchased, freight costs of musical items shipped by suppliers, and annual retainer paid to the musical items distributor are classified as direct and variable. Costs like electricity costs, depreciation expense on the store's lease improvements, and general supplies are classified as indirect and fixed.

Uploaded by

Ara Joyce Permalino
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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MANAGEMENT ACCOUNTING & CONTROL

MBA – 3rd Trimester 2021-2022

COST CONCEPTS AND CLASSIFICATIONS


Learning Activity 5

Cavite Bargain Store, CBS, has been engaged in buying and distributing video and musical items.
Sales are recorded separately for both items. Classify each of the cost items below as either
direct or indirect (D or I) with respect to the musical section and either Variable or Fixed (V or F)
with respect to how the total costs of the musical section as the number of musical items sold
changes. Normally, you will have two answers (D or I, V or F) for each of the following cost
items:

Cost Items D or I V or F
a. Cost of coffee provided free to all customers D V
b. Freight costs of musical items shipped by suppliers to D V
CBS
c. Subscription to Musical Trends magazine I F
d. Annual retainer paid to musical items distributor D V
e. Electricity costs of CBS, single bill covers entire store I F
f. Cost of musical items purchased for sale to customers D V
g. Salary of the general manager of CBS D F
h. Depreciation expense on store’s lease improvements I F
i. Leasing of computer software used for financial I F
budgeting CBS Store
j. General supplies for store maintenance I F
k. Communications costs to suppliers and customers I F
l. Salary of musical items Supervisor I F
m. Salary of video items Supervisor I F
n. Store advertising expense covering all items held for I F
sale

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